CALGARY, July 12, 2012 /PRNewswire/ - Gran Tierra Energy Inc. ("Gran Tierra Energy") (NYSE MKT: GTE, TSX:
GTE), a company focused on oil exploration and production in South America,
today provided a production and capital budget update and updates for
its exploration operations in Colombia.

Production Update

Preliminary corporate production estimates, net after royalties ("NAR")
and before changes in inventory and losses, for the three months ending
June 30,2012 averaged approximately 16,300 barrels of oil equivalent
per day ("BOEPD") consisting of approximately 12,350 BOEPD in Colombia, 3,800 BOEPD in
Argentina and 150 BOEPD in Brazil. Approximately 96% of this
production consists of light oil, with the balance consisting of
natural gas. Due to changes in inventory and pipeline losses, sales
volumes in the quarter may be lower than stated production.

Second quarter 2012 production and sales have been impacted by oil
delivery restrictions due to disruptions on the Ecopetrol-operated
Oleoducto Transandino ("OTA") pipeline in Colombia, the latest of which occurred on July 3, 2012.
Gran Tierra Energy continued production at a reduced rate while the OTA
pipeline was down, selling a portion of its crude through trucking and
storing excess crude. The OTA pipeline continues to be offline with
production expected to return to normal levels early next week.

Due to the repeated OTA pipeline disruptions that have occurred to date,
Gran Tierra Energy does not expect to attain its previously announced
expected average production for 2012 of approximately 20,000 - 21,000
BOEPD NAR. Current production capacity stands at approximately 21,000
BOEPD NAR; uninterrupted consolidated production in April 2012 averaged
approximately 20,700 BOEPD NAR before inventory adjustments. Revised
expected average production guidance will be provided once stable
production is established; exit production rate of 20,000 to 21,000
BOEPD NAR remains unchanged.

Capital Budget Update

In connection with curtailed production and lower commodity prices
experienced this year, Gran Tierra Energy is targeting approximately
$60 million capital expenditure deferments from its previously
announced 2012 budget of $440 million. Deferred expenditures are
expected to be from areas which do not impact production capacity or
near term high value reserve addition projects.

The Bordon-1 exploration well reached true vertical depth of 9,680 feet
on June 16, 2012. Mud log and open hole log data acquired during and
after drilling indicate only non-commercial hydrocarbons present. The
Bordon-1 well was plugged and abandoned.

La Vega Este-1 oil exploration well is currently drilling ahead after
initiating sidetrack operations, and is now expected to reach total
depth in early August.

About Gran Tierra Energy Inc.

Gran Tierra Energy is an international oil and gas exploration and
production company, headquartered in Calgary, Canada, incorporated in
the United States, trading on the NYSE MKT (GTE) and the Toronto Stock
Exchange (GTE), and operating in South America. Gran Tierra Energy
holds interests in producing and prospective properties in Colombia,
Argentina, Peru, and Brazil. Gran Tierra Energy has a strategy that
focuses on establishing a portfolio of producing properties, plus
production enhancement and exploration opportunities to provide a base
for future growth.

Gran Tierra Energy's Securities and Exchange Commission filings are
available on a web site maintained by the Securities and Exchange
Commission at http://www.sec.gov and on SEDAR at http://www.sedar.com.

Forward Looking Statements and Advisories

This news release contains certain forward-looking information and
forward-looking statements (collectively, "forward-looking statements")
under the meaning of applicable securities laws, including Canadian
Securities Administrators' National Instrument 51-102 - Continuous Disclosure Obligations and the United States Private Securities Litigation Reform Act of 1995.
The use of the words "expected", "estimate", "targeting" and
derivations thereof and similar terms identify forward-looking
statements. In particular, but without limiting the foregoing, this
news release contains forward-looking statements regarding the
anticipated timing of return to normal levels at the OTA pipeline, Gran
Tierra Energy's expectation that it will target approximately $60
million capital expenditure deferments from its 2012 budget of $440
million to future years and the nature of such deferments, Gran Tierra
Energy's expectation regarding the timing of production returning to
normal levels, the timing of La Vega Este-1 reaching total depth,
production estimates, and Gran Tierra Energy's expectation that Gran
Tierra Energy will not meet its previously announced expected average
production for 2012 of approximately 20,000 - 21, 000 BOEPD, and
expected capital expenditure deferments from its capital budget.

The forward-looking statements contained in this news release reflect
several material factors and expectations and assumptions of Gran
Tierra Energy including, without limitation: assumptions relating to
log evaluations; that Gran Tierra Energy will continue to conduct its
operations in a manner consistent with past operations; the accuracy of
testing and production results and seismic data; the effects of certain
drilling techniques; cost and price estimates; and the general
continuance of current or, where applicable, assumed operational,
regulatory and industry conditions. Gran Tierra Energy believes the
material factors, expectations and assumptions reflected in the
forward-looking statements are reasonable at this time but no assurance
can be given that these factors, expectations and assumptions will
prove to be correct.

The forward-looking statements contained in this news release are
subject to risks, uncertainties and other factors that could cause
actual results or outcomes to differ materially from those contemplated
by the forward-looking statements, including, among others: estimates
of second quarter 2012 corporate production are preliminary, and actual
production may be different due to unexpected changes discovered in the
finalization of the production amount; unexpected technical
difficulties and operational difficulties may occur, which could impact
or delay the completion or continuation of drilling; geographic,
political and weather conditions can interrupt drilling, which could
impact or delay the commencement or continuation of drilling; service
of the OTA pipeline may not return to normal levels in the timeframe
currently anticipated by Gran Tierra Energy; the OTA pipeline may
continue to experience disruptions and if further disruptions occur,
service at the OTA pipeline may not resume on the timelines or to the
capacity expected by or favorable to Gran Tierra Energy; and the risk
that current global economic and credit market conditions may impact
oil prices and oil consumption more than Gran Tierra Energy currently
predicts, which could cause Gran Tierra Energy to change its current
drilling, production and testing plans. Although Gran Tierra Energy's
plans, including with respect to its deferments, for its ongoing
exploration and development and the funding thereof are based upon the
current expectations of the management of Gran Tierra Energy, there may
be circumstances where, for unforeseen reasons, further changes in such
plans may be necessary as may be determined at the discretion of Gran
Tierra Energy. Should any one of a number of issues arise, Gran Tierra
Energy may find it necessary to make further alterations to its current
business strategy and capital expenditure program. Further information
on potential factors that could affect Gran Tierra Energy are included
in risks detailed from time to time in Gran Tierra Energy's Securities
and Exchange Commission filings, including, without limitation, under
the caption "Risk Factors" in Gran Tierra Energy's Quarterly Report on
Form 10-Q filed May 7, 2012. These filings are available on a Web site
maintained by the Securities and Exchange Commission at
http://www.sec.gov and on SEDAR at www.sedar.com. The forward-looking statements contained herein are expressly
qualified in their entirety by this cautionary statement. The
forward-looking statements included in this press release are made as
of the date of this press release and Gran Tierra Energy disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, except as expressly required by applicable securities
legislation.

Barrels of oil equivalent ("BOE") may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency
conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead. In addition, given that
the value ratio based on the current price of oil as compared to
natural gas is significantly different from the energy equivalent of
six to one, utilizing a BOE conversion ratio of 6 Mcf: 1 bbl would be
misleading as an indication of value.